Rocket Internet shares close down 13% on Frankfurt debut
German internet incubator and investor Rocket Internet saw its shares close down 13% on the first day of trading on the Frankfurt Stock Exchange following a EUR1.6 billion ($2 billion) IPO.
The firm sold 37.9 million new shares, including 4.9 million from an over-allotment option because of strong demand, at EUR42.50. The issue was at least 10 times over-subscribed and none of the existing shareholders sold any shares in the IPO, according to the company.
Once trading began on October 2, the stock fell to EUR36.60 before close at EUR37.
Rocket's shareholders include Global Founders - the investment vehicle owned by Rocket's CEO and founders, Investment AB Kinnevik, Access Industries, Philippine Long Distance Telephone Company (PLDT), United Internet and Holtzbrinck Ventures.
Last month, PLDT acquired a 10% stake in Rocket Internet for EUR333 million.
Earlier this month, Rocket combined five emerging market fashion e-commerce brands into a single company - Global Fashion Group - with a valuation of EUR2.7 billion. The five e-commerce platforms include India's Jabong, Southeast Asia and Australia's Zalora, Middle East's Namshi, Latin America's Dafiti, and Russia's Lamoda.
The drop in trading came one day after Zalando, a European online retailer established by Rocket, listed in Frankfurt without posting a gain. Zalando's stock rose 12% in early trading and then slid to its issue price of EUR21.5.
Founded in 2007 by Samwer brokers, Rocket is active in more than 100 countries, generating revenues of $1 billion last year. The firm focuses on three sectors: e-commerce, marketplaces and financial technology, with a strategy that involves taking concepts that have worked in developed markets and rolling out replicas in the developing world.
The incubator's Asian ventures include Lazada, Wimdu, Office Lab and Pricepanda.
Berenberg, J.P. Morgan and Morgan Stanley were joint global coordinators of the offering as well as serving as joint bookrunners alongside Bank of America Merrill Lynch, Citigroup and UBS.
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